Markets
LRN

American Public Education (APEI) Upgraded to Strong Buy

On Mar 3, Zacks Investment Research upgraded American Public Education, Inc.APEI to a Zacks Rank #1 (Strong Buy). The stock's share price soared 40% since the education company reported better-than-expected results for the fourth quarter of 2015 and the full year on Feb 29.

Why the Upgrade?

American Public Education's fourth-quarter adjusted earnings of 75 cents per share surpassed the Zacks Consensus Estimate of 54 cents by about 38.9% and were significantly above management's expected range of 51-56 cents. Moreover, adjusted earnings soared 10.3% year over year.

Total revenue came in at $85.9 million, surpassing the Zacks Consensus Estimate of $84 million by 2.3%. In fact, the top-line decline of 5.9% was better than the company's expectation of a 6-10% decline.

Moreover, the company issued a better-than-expected guidance for the next quarter. Management projects adjusted earnings per share of 47-52 cents in the first quarter of 2016, which is above than Zacks Consensus Estimate of 41 cents.

Though American Public Education's enrollment levels are still declining, the company has undertaken several initiatives to drive the same, such as the APU mobile app, targeted advertising and ClearPath system. Targeted advertising investments are intended for students with better eligibility for college education. Though this strategy hurts enrollment levels initially, over the longer term, it should improve the quality mix.

The APU mobile app provides students better access to classroom resources, while students who opting for ClearPath, demonstrated a tendency to complete their programs and generate better outcomes. This should further drive strong student outcomes over the long haul, thereby strengthening the company's fundamentals. Lastly, we note that American Public Education's programs are highly affordable, which raises their demand amid this price-sensitive education space.

Stocks to Consider

Other well-ranked stocks in the education industry include Capella Education Co. CPLA , Grand Canyon Education, Inc. LOPE and K12, Inc. LRN . All the three companies have a Zacks Rank #2 (Buy).

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report >>

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

AMER PUB EDUCAT (APEI): Free Stock Analysis Report

CAPELLA EDUCATN (CPLA): Free Stock Analysis Report

K12 INC (LRN): Free Stock Analysis Report

GRAND CANYON ED (LOPE): Free Stock Analysis Report

To read this article on Zacks.com click here.

Zacks Investment Research

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

In This Story

LRN LOPE APEI

Other Topics

Stocks

Latest Markets Videos

Zacks

Zacks is the leading investment research firm focusing on stock research, analysis and recommendations. In 1978, our founder discovered the power of earnings estimate revisions to enable profitable investment decisions. Today, that discovery is still the heart of the Zacks Rank. A wealth of resources for individual investors is available at www.zacks.com.

Learn More